With a bearish outlook for the Cattle on Feed report and cash trade all but complete nervous traders pounded the futures markets on Friday, August 24, 2018. Pressing the markets all session, sellers took price down towards support at 106.025, making the low just above it at 106.475 for Live Cattle. Feeders traded below trendline support (146.825) and made its low at 146.50. Both markets settled near their lows. The Cattle on Feed report showed the highest inventory on August 1st since the series began in 1996, with 11,093,000 head on feed, up 5% over last year. Placements were higher than 8% last year, with analysts expecting a 5.5% increase. This is a bearish figure in my opinion. Cattle marketed during July increased 5% over last year, in line with the up 4.9% guesstimates. With the summer grilling season coming to an end and next week’s buying of cattle for a short slaughter week due to the labor day holiday, I expect futures prices and cash prices to continue to work their way lower next week.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, August 23rd at 3:00 pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon completion of the webinar.
**Call me for a free consultation for a marketing plan regarding your livestock needs.* *
Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109,
www.walshtrading.com
RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.